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Gov. Holcomb weighs in on whether income tax should be eliminated ahead of session
As Gov. Eric Holcomb prepares to release his final two-year budget, he’s not saying much about his political future or whether he’ll jump into a Senate race as he gets term-limited out of office.
State Affairs recently sat down for a one-on-one interview with Holcomb to discuss how he wants to spend taxpayers’ money in the upcoming session, his thoughts on a Democratic lawmaker’s plan to nix unconstitutional language in Indiana law that bans same-sex marriage and if the state should eventually nix the personal income tax.
The conversation is edited for clarity, brevity and length.
The upcoming budget
Q. The state’s revenue forecast showed about $600 million additional per year, over the next two years. Sen. Ryan Mishler said there’s already $700 million worth of agency requests, and capital projects are already over budget. Do you think fully funding the public health commission’s $243 million financial request makes sense and is doable even in the second year of the two-year budget? If so, how will you balance the different requests for money, READI grant money and any K-12 budget increases?
A. I think it's important to keep in context that we're operating off of a budget in the $18 billion range, and now we're looking at [2024 revenues] in the $20 billion range, and $21 billion in fiscal year 25, so we’re operating off a budget that was much lower than [the revenues] that we have.
The quick answer is yes, we can implement our public health recommendations financially. That's $120 [million] in the first year and $240 [million], as you alluded to, in the second year and ongoing. But we also have to keep in mind the impact inflation has had on certain projects that we contemplated.
The April forecast will be even more important than this one. But, my budget team was thinking [the revenues were] going to be even lower than the revenue forecasters presented. So, we're pleased with where we are, and we think that we can meet our priorities. Those centrally revolve around economic development and education and workforce development and both public and personal health and wellbeing.
This comes from a compassionate origin or source, but also a competitive source, and we just don't have the luxury as a state of Indiana — not very many people do — of leaving anyone on the sidelines. We have to get smarter and healthier if we want to compete and meet these high-wage, high-demand jobs that are wanting to come to the state of Indiana.
But we want to make sure we're growing 10 years from now, and that means we’ve got to double down and triple down on literacy, so we'll be pushing for increases in public education as well, not just to throw more money at it.
I am encouraged that leaders and members of the General Assembly are wanting to see the information that [the public health commission compiled]. We got representation on this commission that did a really deep dive, and said we'd been doing it one way for 100 plus years. How should we be doing it today? The state of Indiana has at its disposal certain expertise and resources that local communities just don't have. So how do we partner? How do we do that smartly? How are we transparent about it? How do we measure it?
And I think those [questions] will answer legislative concerns that are rightly placed, quite frankly. I agree with them that we're not trying to write a $240 million check and go, ‘There, our work is done. We lead the horse to the water. Now it will drink.’ But we do know there are gaps. And we do know there are hurdles and barriers, that if we do a better job, we will not just out-cooperate but we’ll out-compete some of the competition, and it’s fierce.
Q. You signed a bill that eliminated the utility receipt tax earlier this year. A Democrat pointed out that that money could have almost paid for the implementation of the public health recommendations. Do you still think that tax elimination, as well as the income tax cuts, were a smart move now that revenues are plateauing and capital project expenses are increasing?
A. I think it was the right move, not just at the time but going forward. We’re cutting personal income taxes as we sit right now as well, and it is a real strength to be a low-cost state to, not just live, but to do business. In times of global inflationary pressure, where we can reduce costs makes us even more attractive.
There's a reason why we've been able to grow our economy, from a GDP perspective, and just an ongoing revenue perspective in terms of how we then fund public health and education. We've added over $3 billion to public education since I was sworn in. We don't get to do that unless we grow the pie, grow the revenue.
Part of the reason businesses are coming here is because we're a low-cost state, [both] tax and regulatory, because we offer great sites and because we offer access to high talent. It's not an either, or. You could say that all day long about, ‘Well if we wouldn't have done this, then we could have.’ But low cost is very attractive to people who are wanting to grow.
Potential income tax elimination
Q. Republicans in the Senate say that they want to look at potentially eliminating the personal income tax in Indiana, years down the road. Is this something that you think the state should pursue?
A. Cautiously. I think it's something that states should discuss. I’ve heard about this conversation for years now. When I sat on the other side of this desk and worked for someone, I heard this being bantered around.
One of the advantages that Indiana has is a regulatory and tax structure that is very consistent, certain and helps you weather the tough times maybe better than some other structures. So, I have always asked, ‘If you eliminate that tax, what do you replace it with or what do you live without?’ That's the part that really needs to be digested and discussed.
If you want to say we want to compete with states who don't have personal income tax, well don't compare Indiana's property taxes with Texas, who is one of our fierce competitors, but they have higher taxes in other areas. So do you want to tell the homeowner, ‘Well, we're gonna triple your property taxes, because we're gonna get rid [of income taxes?’
Q. Do you have an answer for what would replace that revenue or what you would get rid of?
A. No, because we're out competing and winning right now in the tax structure that we have. And by the way, we just reduced our corporate taxes and we are reducing right now our income taxes, so long as we continue to grow. And those are very persuasive.
Q. A Democratic lawmaker is filing a bill to remove the unconstitutional language in Indiana code that prohibits same-sex marriages. Do you think that language should remain in state law?
A. The law is invalid. This is a very hypothetical question that's been resolved at the federal level, at the Supreme Court level. I know there was a justice that commented on it. But I think his issue has been resolved, and no action is needed.
Q. Fellow Republicans criticize you the most for your handling of the pandemic. What is your biggest regret from that time period?
A. I don't have any regrets, honestly. This was such a new, unprecedented experience for almost anyone living to have gone through, unless you were around in 1918. There's such a difference between the legislative branch and the executive branch that it was almost inevitable that there would be a collision. There was with Democratic governors and Democrat legislatures and Republican governors with Republican legislatures.
It was almost unavoidable, because it was such a rare, unprecedented occurrence, that there would be some disagreement. We even disagreed on the constitutionality [of whether or not lawmakers could call themselves back for a special session during an emergency], an honest disagreement. Fortunately, that was resolved at the Supreme Court level.
Obviously, the good news is this: We had this discussion with a campaign underway. Now it wasn't a typical campaign because I just said, ‘I'm gonna let my work speak for itself.’ But citizens expressed their approval or disapproval, and that turned out okay.
When you sail through a storm, it's at its worst. Sometimes in hindsight, when you look back and there's not as much emotion feeding off of other emotions, you tend to think, okay, we got through that. We balanced lives and livelihoods, and we emerged out of it better than many, quicker than many [other states]. So I'm proud of our team and I'm proud of the local health departments.
And so any slings and arrows that we might have gotten in the past is in the past.
Holcomb's political future
Q. Speaking of campaigns, are you considering a Senate run?
A. Not right now. I’m not going to let anything interfere with my focus, and my focus right now is the budget session that’s upon us.
Q. Does that mean you’ve ruled it out?
A. I haven’t ruled anything out or in. I've told multiple people from different walks that have expressed an interest or asked me to think about something, I’ve literally told 100% of them the same thing so that if one talks to the other they will get the same response. If you need an answer now, I'm not your guy. And that's what I'll continue to tell people, and I mean it.
What Holcomb is listening to
Q. Do you have Spotify or Apple Music? Do you know what your top song on Apple Replay is?
A. Well that’s a good one. Can I give you the top three?
A. That’s funny. That’s the first time I’ve ever gotten this.
It’s Pearl Jam’s “Alive.” “Right Now” Van Halen, two. “Feeling stronger Everyday” by Chicago.
Republican gubernatorial candidate Eric Doden is calling on the Indiana Chamber of Commerce to end its support for school district consolidation in rural Indiana.
In a letter sent today, the Fort Wayne businessman labeled the business group’s position as “damaging.”
“While the stated aims of this position are laudable, the message sent to our small towns and rural communities is damaging,” Doden wrote. “Proposing to do away with small public school districts through consolidation will be seen as a death knell for the millions of Hoosiers who live in small towns and rural communities.”
For years, the Indiana Chamber has advocated for fewer school districts across Indiana. A 2017 study commissioned through Ball State University identified worse educational outcomes for students in smaller districts in several categories, including scores for state standardized testing and the SAT, as well as the pass rates for Advanced Placement classes.
The Indiana Chamber re-upped its position last month when it released its long term economic development plan. Among the listed policies was a goal to “reduce by half the number of very small school districts with enrollments below 2,000 students to provide much stronger educational opportunities for rural students and communities.”
More than half of Indiana’s school districts have fewer than 2,000 students.
In a statement to State Affairs, Indiana Chamber President and CEO Kevin Brinegar said the state is providing a “two-tiered educational system” depending on income and ZIP code.
“Hoosier students should not be limited academically solely due to where they live. And that’s the case now in some of the smaller school districts where students are not afforded the opportunity to take a full array of STEM, Advanced Placement or college preparation courses,” Brinegar said in the statement. “The Chamber’s stance on smaller school district consolidation is rooted in wanting to lift up young Hoosiers in these rural communities, so they have a better chance at prosperity by properly preparing them for the state’s current and future job opportunities.”
The statement also contained a specific response to Doden’s criticism.
“We would be happy to sit down with Mr. Doden and go through the research and show him why we have adopted this position for the betterment of the academic and economic opportunities for our young people,” Brinegar said in the statement. “The status quo that Mr. Doden is championing has and will continue to leave small communities, schools and students behind. That’s not acceptable.”
But whereas the business group sees consolidation as one way to improve life in rural Indiana, Doden sees the opposite.
“Across our state it’s easy to see the remnants of a school consolidation push that began in the 1950s,” Doden wrote in his letter. “Too many towns that lost their local school to consolidation dried up and were virtually swept from the maps while other towns kept their schools and their identities. These communities had a better opportunity to survive.”
Doden also cited one of his policy proposals, which would redirect $100 million in state money toward small towns — in an effort to address declines in populations and quality of life.
“With local leadership and local control, we can revitalize our small towns and hometowns with a fraction of the investment we give away in the form of incentives,” Doden wrote.
Doden addressed the letter to Vanessa Green Sinders, who will replace Brinegar as the Indiana Chamber’s leader. Her tenure will begin in January, so she was unavailable to provide comment to State Affairs. Either way, the Indiana Chamber’s members are the ones who suggest policy positions for the board of directors to approve before each legislative session.
In addition to Doden, the crowded Republican field for governor includes U.S. Sen. Mike Braun, former Commerce Secretary Brad Chambers, Lt. Gov. Suzanne Crouch and former Attorney General Curtis Hill.
Jennifer McCormick, the former state superintendent of public education, has emerged as the leading Democratic candidate. Instead of school district consolidation, the state should reevaluate its expansion of school choice vouchers, McCormick has previously said.
Header image: Eric Doden, 2024 Republican candidate for governor of Indiana (Credit: Eric Doden for Indiana Governor/Facebook)
The Indiana Supreme Court Disciplinary Commission today filed a formal complaint against state Attorney General Todd Rokita that alleges three violations of attorney professional conduct rules.
Rokita faces official allegations that he committed professional misconduct with his public comments about Dr. Caitlin Bernard after she provided an abortion to a 10-year-old Ohio rape victim last summer.
Rokita is defending his actions, saying that state confidentiality laws shouldn’t apply to him because Bernard was the first to talk in the news media about the girl’s treatment. It could take months before the state Supreme Court decides whether Rokita will face any punishment.
The commission didn’t ask for a specific punishment against Rokita, asking simply that he be “disciplined as warranted for professional misconduct” by the state Supreme Court.
Commission Executive Director Adrienne Meiring filed the complaint that focuses on actions by Rokita and his office between early July 2022 and Nov. 30, 2022, when the attorney general’s office filed a misconduct complaint against Bernard with the state Medical Licensing Board.
Bernard drew national attention in the days after a July 1, 2022, story by The Indianapolis Star quoting her about the young girl’s abortion just days after the U.S. Supreme Court’s overturning of Roe v. Wade.
The complaint against Rokita highlights his July 13 appearance on a Fox News program, during which he said he would investigate Bernard’s actions and called her an “abortion activist acting as a doctor — with a history of failing to report.”
It also points to his office’s unusual action of publicly releasing on July 13 a letter to Gov. Eric Holcomb that named Bernard in seeking records from two state agencies and a July 14 press release from his office about the investigation.
The complaint alleges Rokita’s actions violated confidentiality requirements of pending medical licensing investigations under state law and by doing so Rokita “caused irreparable harm to Dr. Bernard’s reputational and professional image.”
Rokita responded Monday with a legal filing saying that the confidentiality requirements shouldn’t apply to him because Bernard had already gone public about the girl’s medical treatment.
Rokita also argued that “The Attorney General, an elected official who answers to the public, has a duty to keep the public informed of the Office’s actions and decisions.”
The state Medical Licensing Board voted 5-1 in May to reprimand Bernard and fine her $3,000 for violating patient privacy laws. The board, however, voted unanimously to reject allegations from the attorney general’s office that Bernard violated state law by not reporting the child abuse that led to the girl’s pregnancy to Indiana authorities and did not issue any restrictions on Bernard’s medical license.
Why It Matters
The Disciplinary Commission’s complaint carries the potential of forcing the Republican attorney general from office.
State law requires that the attorney general be “duly licensed to practice law in Indiana.” The state Supreme Court, which has the final say over attorney disciplinary matters, has wide discretion, with options all the way up to permanently stripping an attorney of his law license.
Rokita won the Republican nomination for attorney general in 2020 over then-Attorney General Curtis Hill after Hill faced allegations that he drunkenly groped four women at a party celebrating the end of the 2018 legislative session.
The Supreme Court suspended Hill’s law license for 30 days, saying that “by clear and convincing evidence that [Hill] committed the criminal act of battery.” The court rejected the hearing officer’s recommendation of a longer suspension that could have forced him from office. Hill is now seeking the Republican 2024 nomination for governor.
Rokita has sought to burnish his anti-abortion and national profile with the Bernard case. Besides challenging Bernard’s medical license, his office last week filed a lawsuit against the doctor’s employer, Indiana University Health, alleging it violated federal law by allowing Bernard to disclose information about the Ohio girl’s treatment. The girl’s mother brought her to Indiana to receive abortion drugs because an Ohio ban on abortions after six weeks had taken effect after the U.S. Supreme Court’s ruling last summer.
Rokita is entitled to defend himself with a hearing before a judicial officer appointed by the Supreme Court, who would then submit a recommended punishment to the court.
In Hill’s case, it took about 14 months from the time that the disciplinary complaint was filed against him for the court’s five justices to receive the case and make their decision.
Rokita’s defense lawyers include two from the Washington, D.C., firm Schaerr-Jaffe. The firm also assisted the attorney general’s office with the case against Bernard under a contract allowing it to bill the state $550 an hour for work by the firm’s attorneys.
“This is a complaint against the official duties of the Attorney General and is an attack against his official capacity, so this is paid by the office,” Rokita’s office said.
Rokita isn’t backing down in the political battle, either, as he released a statement Monday calling himself “a passionate fighter” who “is beating back the culture of death, grievance and transanity being pushed by radicals in workplaces, schools, media and government.”
Democrats argue Rokita is using the Bernard case “to further his own personal political ambitions.”
“Todd Rokita’s actions toward Dr. Caitlin Bernard over the past year brought shame and ridicule upon our state,” Indiana Democratic Chairman Mike Schmuhl said in a statement. “Now, he is starting to see the consequences of making baseless claims regarding a medical professional on national television.”
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Header image: Indiana Attorney General Todd Rokita speaks during the America First Agenda Summit organized by America First Policy Institute. (Photo by Oliver Contreras/SIPA USA)(Sipa via AP Images)
Republican Sen. Jon Ford of Terre Haute confirmed Friday that he is resigning from the Legislature to become leader of an association that promotes the coal industry and other fossil fuel producers in Indiana.
Ford told State Affairs that he will join Reliable Energy this fall after his Senate resignation takes effect Oct. 16.
“I’ll be running the association, the business side of it,” said Ford, who faces a one-year prohibition on being a paid lobbyist after leaving the Legislature.
What is Reliable Energy?
Reliable Energy was incorporated as a nonprofit corporation by prominent lobbyist Matt Bell in 2020 with the same downtown Indianapolis address as his Catalyst Public Affairs Group.
In testimony to a legislative committee last year, Bell described the group’s members as “fossil fuel producers and the Hoosier businesses supporting the fossil fuel industry.”
“Reliable Energy advocates for policies that ensure an abundant supply of available, affordable and dependable energy in Indiana and across the country,” Bell’s testimony said.
The organization is an offshoot of the Indiana Coal Council.
“I think it really grew out of that group and is really a group made up of membership of people involved in energy in a lot of different ways,” Ford said. “Many of the members are vertically integrated power companies. Some produce coal, some produce energy. Most are involved in alternative energies, as well.”
Ford’s reasons for resignation?
Ford, who was first elected to the Senate in 2014, won reelection last November to a four-year term. His resignation will result in a new senator serving for three legislative sessions without appearing on a general election ballot.
Ford cited personal reasons for deciding to resign less than a year after winning his new Senate term.
“Some things in my life have changed that made me think, you know, the passing of friends and other life events made me rethink what I wanted to do in my life and what I had achieved in the district,” Ford said. “I just felt it was time to move on.”
Ford said the Reliable Energy position didn’t prompt his Senate resignation.
“The job really came after the decision that it was time to move on,” he said.
Ford hasn’t specialized in energy-related issues while in the Legislature and hasn’t been a member of the utilities or environmental committees that consider most such legislation.
Ford has been business development director for the economic and community development group Thrive West Central, based in Terre Haute.
Will Ford become a lobbyist?
State law prohibits members of the General Assembly from lobbying former colleagues for one year after leaving office.
Ford said that even after that time he was not sure he would become an advocate for Reliable Energy in the Statehouse hallways.
“This group has had a hired lobbyist for a while that’s worked with them, so I don’t know,” Ford said. “I would see it playing a similar role to many other associations that are out there, but, you know, main focus will be to grow it and to focus on where Indiana goes forward with energy.”
Involvement in selecting replacement?
Ford was noncommittal on whether he would endorse a candidate to replace him ahead of the caucus of Republican precinct committee leaders who will make that decision in the coming weeks.
“I don’t know at this time, it really depends, I guess, on who steps up,” Ford said. “I don’t foresee myself being at the vote, to be quite honest. I think it’s a decision of the precinct committeemen.”
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Header image: Republican Sen. Jon Ford speaks in the Indiana Senate chamber. (Credit: Indiana Senate Republicans)
Indiana’s 988 Suicide and Crisis Lifeline is already receiving more than 3,000 calls per month a little more than a year after its launch, according to the Indiana Family and Social Services Administration, and more than 90% of the calls are being answered by trained Hoosiers.
The state agency provided an update this week in part to raise awareness for National Suicide Prevention Month.
The 988 hotline is a free resource for people who are experiencing a crisis. Callers can receive a supportive ear on the call as well as resources to help.
That’s why state officials want to have as many calls as possible answered by people who live in Indiana. While the calls are being backstopped by people working nationally, the people working in Indiana’s five call centers can more easily connect callers to in-person resources to help with whatever is contributing to the crisis, such as a lack of food or housing.
Indiana’s answer rate of more than 90% since November is leading the nation, according to state officials.
A caller’s average wait time is about 10 seconds, said Kara Biro, Family and Social Services Administration state director of behavioral health crisis care, and the average call lasts 12 to 20 minutes.
The hotline, launched in Indiana last July, is just the first step in a larger vision. The state is steadily building a three-part crisis system that also includes mobile crisis teams to respond to calls for help and crisis stabilization units where people can go for up to 23 hours at a time to receive care.
“We are marching toward a time where individuals in crisis, regardless of day, time or location, have someone to call, someone who can respond, and a safe place to help,” Family and Social Services Administration Secretary Dr. Daniel Rusyniak said.
Why It Matters
As a result, Indiana is persistently ranked as one of the worst states by the nonprofit Mental Health America when it comes to mental health treatment.
But, almost quietly, change appears to be on the horizon. And maybe even hope.
During the last legislative session, Indiana lawmakers poured $100 million in new money over two years into mental health treatment.
That amounted to less than half of what experts say is needed to fully address the crisis. At least $130.6 million per year would be needed, according to a 2022 estimate by the state.
But an additional $50 million per year was still celebrated by Gov. Eric Holcomb and mental health advocates — who all noted that the three-part crisis system will not be built overnight anyway.
And that’s on top of the more than $100 million that the federal government sent Indiana to kickstart the creation of the three-part crisis system.
In June, state officials awarded a combined $57 million in federal American Rescue Plan dollars to community mental health centers in 15 counties to expand the services they provide to people in crisis.
Stabilization units, in particular, were the focus of the grants.
“These are physical locations — a safe place for help — where individuals in crisis will be stabilized and connected with follow up care,” Jay Chaudhary, director of the state’s Division of Mental Health and Addiction, said at the time. “Too many Hoosiers today in behavioral health crises end up in a jail or in the emergency department.”
Meanwhile, the Family and Social Services Administration is on track to apply for what’s called a Medicaid demonstration program. If approved, mental health providers would receive greater Medicaid reimbursements, which advocates say would make it far easier to implement and expand the services they can provide to Hoosiers who need mental health treatment. The state is facing a March 2024 deadline to apply, officials confirmed this week.
And the state is still hoping for statewide coverage of the three-part crisis system by 2027.
As for the 988 hotline, state officials are hoping to increase accessibility to people who don’t speak English or who are deaf or hard of hearing.
If you or someone you know is in crisis, please call the 988 Suicide and Crisis Lifeline, which has trained listeners standing by and ready to help. Visit 988indiana.org for crisis services or for more information. Visit the Indiana Suicide Prevention website for resources.
Header image: Indiana’s 988 Suicide and Crisis Lifeline launched last year and is already receiving more than 3,000 calls per month. (Credit: Indiana Family and Social Services Administration)